Could tax reform benefit consumer spending?

Investment strategies featuring the quality factor could benefit from current trends in consumer spending

Time to read: 2 min

Advance estimates of US retail sales for December 2017 displayed vibrant year-over-year growth of 5.64%, according to the US Census Bureau.1 The most recent report, released on Jan. 12, covers sales ex-food, automobiles, gasoline and building materials. December sales growth was at its highest level since peaks in 2011 and 2014, and was above the trend seen since early 2011 — further highlighting strength in consumer activity.

Continue

Calculating the impact of tax reform

Weekly Market Compass: Will the benefits outweigh the concerns?

Time to read: 5 min

In a number of places around the world, it’s an exciting time to be a taxpayer — or tax attorney. That’s because a variety of countries have brought or are bringing tax cuts to fruition.

At the end of 2017, the US saw the passage of a tax reform bill with many elements to it, ranging from household tax cuts to corporate tax cuts. In France, tax cuts, including a business tax cut, were implemented. The Netherlands and Belgium both enacted tax cuts in 2017. In December, Japan enacted new corporate tax cuts, including ones tied to incentives. And other countries are pondering corporate tax cuts in order to remain competitive with those countries that have already lowered taxes on their businesses.

Not all tax cuts have the same impact

Continue

Tax reform: A year-end bonus for fixed income?

How the new tax legislation will impact the US investment grade market

Time to read: 3 min

Despite the near non-stop drama of the legislative process, we ended December with the Tax Cut and Jobs Act of 2017 being signed into law. What does this mean for fixed income investors? In my opinion, the news is overwhelmingly positive for the US investment grade market; here are four reasons why.

Continue

What might tax reform mean to your retirement account?

Both the House and Senate tax reform plans keep 401(k) deferral limits, but they make other retirement-related changes

Jon VoglerTime to read: 3 min

On Nov. 2, House Republicans unveiled their long-awaited tax reform proposal (the Tax Reform and Jobs Act), which calls for substantial tax cuts, offset in part by the elimination or modification of numerous tax incentives. Not included in the bill were rumored “Rothification” changes that would have reduced the tax incentives enjoyed by many retirement savers — forcing some or all new individual retirement account (IRA) and employee 401(k) and 403(b) contributions to be made on an after-tax basis into Roth accounts, rather than on a traditional pre-tax basis. However, several technical changes were made to certain plan and IRA features.

Retirement provisions in the House bill

Continue

Could tax reform boost value stocks?

2018 outlook: A drop in the corporate tax rate could help create jobs and grow wages

Time to read: 2 min

As 2017 nears its end, US value stocks are mired in their longest stretch of underperformance versus growth stocks since the Great Depression, held back by low interest rates and easy monetary policy. In my view, the top issue that will help determine whether that trend continues or abates is US tax reform.

In late September, Republicans unveiled their proposal, which addressed the repatriation tax, household taxation and corporate taxation.

Continue